Bharat Dynamics informed the stock exchanges that the government is looking to sell at least 1.83 crore shares in a base offer, and could sell another 91 lakh shares if it receives an oversubscription
Bharat Dynamics share price plunged 13.49 per cent to Rs 332.60 apiece on BSE a day after the defence company informed that government is planning to sell 15 per cent stake in Bharat Dynamics through an offer for sale (OFS) on 8-9 September. The floor price for the OFS has been fixed at Rs 330 per share, which is a 14 per cent discount to Monday’s close of Rs 384.50. The centre owns 87.75 per cent stake in the defence company and is looking to offload 2.71 crore shares. “The offer for sale to the tune of 15% of the Government of India (GOI) stake is worth considering. Though the stock is still trading at a discount to its IPO price, however, the recent GOI push on increasing domestic defence procurement, higher localization and focus on lean cost structure is likely to drive revenue growth for the company,” Arjun Mahajan – Head- Institutional Business at Reliance Securities, told Financial Express Online.
Further, Mahajan added that the recent standoff between India and China on the border makes a compelling argument for Make in India and focus on defence capabilities build up. Thus, this offer for sale is a good opportunity to look at the stock. Finally, for the retail investor, there is a further discount of Rs 20 which may be worth considering. “Defence is a focus sector and such opportunities should be considered for investors who have a long-term investment horizon,” Mahajan added.
Bharat Dynamics informed the stock exchanges that the government is looking to sell at least 1.83 crore shares in a base offer, and could sell another 91 lakh shares if it receives an oversubscription. Around 10.45 AM, Bharat Dynamics shares were trading 13.09 per cent lower at Rs 334.70 apiece, as compared to a 0.68 per cent rise in the benchmark S&P BSE Sensex. The stock hit a 52-week high of Rs 481.25 last month. Bharat Dynamics stock price has corrected 31 per cent in less than a month. The stock hit a 52-week low of Rs 147 apiece in intra-day deals in March this year.
The President of India, acting through and represented by the Department of Defence Production, Ministry of Defence, Government of India, is the promoter of Bharat Dynamics. “The promoter proposes to sell up to 1,83,28,125 equity shares of the total issued and paid-up equity share capital of the company having a face value of Rs 10 each, on September 8, 2020, for non-retail investors only and on September 9, 2020, for retail investors and for un-allotted non-retail investors who choose to carry forward their bids with an option to additionally sell 91,64,063 equity shares (representing 5% of the total issued and paid-up equity share capital of the company), said Bharat Dynamics in an exchange filing.